Go ahead for two new North Sea oil fields

Plans for increased North Sea oil production have been outlined by the Government as ministers gave the green light for two new field developments.

Business Secretary John Hutton also announced changes to the system for licensing oil fields in the North Sea and said there had been a record amount of interest in the latest licensing rounds.

The new developments, West Don and Don South West, are due to start production in the first half of next year and are estimated to produce up to 50,000 barrels of oil a day at their peak, with total output of 50 million barrels.

Hutton also outlined plans for new oil and gas fields to be carved out of unprofitable parts of around 30 existing fields, which could see additional daily production of 20,000 barrels of oil.

The minister said a record 193 applications had been received to explore for oil and gas in the latest licensing round.

Hutton said: "High global oil prices are in part a signal that producing countries need to increase supply. All oil producing countries need to take action, and it's therefore important for us to make sure we sustain the right environment to maximise recovery of the UK's own reserves.

"The North Sea industry is of central importance to the British economy. It supports some 380,000 jobs, with investment worth around £5 billion a year.

"The level of interest there is for investment in the UK oil and gas sector is an overwhelming endorsement of the Government's policies to bring new players into the market, and exploit fully our reserves.

"The approval for the West Don and Don South West fields are prime examples of this. Both were unexploited discoveries, which will now provide additional reserves to bolster UK supplies."

Both West Don and Don South West are located in the northern North Sea, approximately 150 kilometres north east of the Shetland Islands in a water depth of approximately 500 feet.

The operator for the Don Fields is Petrofac Energy Developments Limited, and the first oil is targeted for the first half of next year.